Filing Bankruptcy in North Carolina

Talk to a Bankruptcy Lawyer

Bankruptcy is a system of federal law, so the process to file for
Chapter 7 bankruptcy or to file
for Chapter 13 bankruptcy is nearly identical in
every state, including North Carolina. However, state law plays an important
role, particularly in setting property exemptions, which determine what
property you get to keep (if you file for Chapter 7) and how much you have to
repay your creditors (if you file for Chapter 13). There are also important
resources available to you by state.

Credit Counseling

Before you file for Chapter 7 or Chapter 13 bankruptcy in North
Carolina, you will have to complete mandatory credit counseling with an agency
that’s been approved by the United States Trustee’s Office. Here’s a list
of agencies in North Carolina that have been approved to provide this
counseling.

In North Carolina, you must use the state’s exemption list;
although some states allow debtors to choose between the state list and a
federal list, North Carolina isn’t one of them.

North Carolina has a homestead exemption for real or personal property used as a residence. The exemption amount is $35,000, or $60,000 if you are 65 or older. Instead of using the homestead exemption, you can exempt up to $18,500 in a burial plot. In North Carolina, you can also exempt a motor vehicle to $3,500, health aids, college savings accounts, and various items of personal property, among other things. Here’s a
list of
North Carolina exemptions.

The Means Test

When you file for bankruptcy, you must compare your income to the
median income for a household of your size in North Carolina. If your income is
less than the median, you will be eligible to file for Chapter 7 and, if you
choose to file for Chapter 13, you can use a three-year repayment plan (rather
than five years).

Currently, the median North Carolina income for a one-person
household is just under $38,000; these figures change periodically. You can find the most recent amounts on the website of the U.S. Trustee at www.justice.gov/ust. Click on “Bankruptcy Reform,” and then “Means Testing Information.” Or go directly to the Census Bureau table here.

Debtor Education

After you file for bankruptcy but before you receive your
discharge, you must take a debtor
education course. Like the mandatory credit counseling you must take before
filing your forms, you must receive debtor education from an agency approved by
the U.S. Trustee’s Office. Here a list
of agencies approved to provide this course in North Carolina.